Stocks For When You Don't Want Stocks

Andrew Fisher

Wednesday, 27 Feb 2008 | 8:01 AM ETCNBC.com

SHARES

Harbor Advisory's chief investment officer Jack DeGan has no doubts that these are challenging

CNBC.com

times.

"If we don't get a recession out of the worst credit crunch we've had since the Depression, the worst housing crash since the Depression, and a tremendous oil shock, then we'll probably never get another one," he told CNBC.

So are we in a recession now?

"I think if you believe you're in a recession, as Joe [Kernen] said to me a while back, you want to not own anything with a ticker symbol, just about," he said.

DeGan has some advice for those who think otherwise.

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He's got some tough stocks to ride out the rough weather with.

"If you believe the manufacturing sector is going to be strong, things I think you should own there are Caterpillar , General Electric ,, Boeing , Emerson Electric ," he said. "The reason is, they all get more than half of their sales from outside the U.S.; they're well-managed companies, strong balance sheets; they're levered to the international infrastructure build-out, you're probably safe there."

General Electric is the parent company of CNBC.com.

DeGan is especially cautious about consumer-related stocks, but he has some choices there, too: Google , American Express , and Hewlett Packard.

"If you believe the consumer's going to make it through this, these three stocks are some that I would own," he said. "We started buying Google...because we think the secular trend of advertising from offline to online is going to be around for a long time."

And what about the so-called "recession-proof" stocks?

"Those are the stocks that we like...things like Procter and Gamble, Pepsi, and Johnson and Johnson," DeGan said. "These are companies who do slow down in a slower economic environment, but they'll still gain sales, they'll still grow earnings...they're good for individual investors who want to try to ride out a tough time."

DeGan's firm owns more than one per cent of each of all those companies.